Signs Point to Improving Market Outlook in 2023 as Inflation Cools, Earnings Rebound, and Stock Leadership Broadens
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Inflation has realized its largest decline on record without causing a recession, supporting the outlook for a soft landing in 2024.
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Earnings growth has returned for the S&P 500, with 8 of 11 sectors reporting growth in Q3. This should continue improving in 2023.
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Market breadth is improving, with cyclical sectors leading gains recently. This suggests the 7 mega-cap tech stocks are losing their market dominance.
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Rare bullish breadth signals like the Zweig Thrust suggest strong S&P 500 returns over the next 6-12 months.
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With rates peaking and earnings growing again, 2023 setup looks attractive for the average stock as breadth improves after 2 years of mega-cap dominance.